U.S. business spending slips, new home sales rise in August

WASHINGTON, Sept 24 (Reuters) - U.S. business investment
fell slightly in August, excluding spending on aircraft and
defense equipment, but new home sales rose, suggesting that
global economic headwinds were doing little to impede U.S.
growth.

The U.S. economy is on track to grow 1.4 percent in the
third quarter, the Atlanta Federal Reserve's GDPNow forecast
model showed on Thursday.

The Commerce Department said capital goods orders excluding
military wares and aircraft, a closely watched proxy for
business spending plans, dropped 0.2 percent last month, a
slightly bigger fall than analysts polled by Reuters had
expected.

However, August's decline followed a gain in July that was
the largest in over a year and which had boosted optimism that
many American companies were unfazed by weak overseas markets.

The recent trend in orders gives a good signal for economic
growth in the third quarter after business investment on
equipment fell in the April-June period.

"Investment in equipment appears to be recovering," said
Paul Ashworth, an economist for Capital Economics.

Durable goods orders overall fell 2.0 percent in August, in
line with forecasts, but held back by a sharp decline in orders
for civilian aircraft. Excluding transportation, orders were
little changed.

Some business sectors are being hit by falling commodity
prices though, with Caterpillar Inc saying it might
close or consolidate more than 20 plants around the world across
its three large businesses - construction, resources, and energy
and transportation.

Caterpillar Inc cut its 2015 revenue forecast and said it
could cut up to 10,000 jobs through 2018, on Thursday joining a
list of big U.S. industrial companies grappling with the shock
waves from the mining and energy downturn.

U.S. stock prices were lower in afternoon trading on
Thursday, weighed down by a 6.0 percent fall in the shares of
Caterpillar, the world's biggest mining and construction
equipment maker.

Other economic data on Thursday showed that robust job
growth over the last year has helped the country's housing
market, which took a big hit in the 2007-09 recession.

A separate report from the U.S. Labor Department showed
initial claims for state unemployment benefits rose by 3,000 to
a seasonally adjusted 267,000 for the week ended Sept. 19.
Analysts had expected new claims to rise more.

The four-week moving average of jobless claims fell by 750
to 271,750, which was close to its lowest level since 2000 and
suggests the job market continues to strengthen.

The trend in jobless claims continues to give bullish signs
on the health of the U.S. labor market, which is critical for
the Federal Reserve's plans to lift interest rates as soon as
this year.

Other U.S. economic data on Thursday showed new home sales
in August surged 5.7 percent to an annual pace of 552,000 or the
highest level since 2008. The gain was much larger than analysts
had expected and came on the back of a strong revision in the
pace of sales during July.

Fed Chair Janet Yellen said last week that the Fed declined
to raise interest rates in September in part because of concerns
that weakness in China's economy could slow global economic
growth, but there is little sign of an appreciable U.S. slowdown
yet.

The U.S. economy is on track to grow 1.4 percent in the
third quarter following a steeper-than-forecast 4.8 percent drop
in home resales in August, the Atlanta Federal Reserve's GDPNow
forecast model showed on Friday.

This was a slightly slower pace from the regional Fed bank's
prior estimate of 1.5 percent on Sept. 17, the Atlanta Fed said
on its website.

"The decline occurred on Monday when the model's forecast
for third-quarter real residential investment growth fell in
response to the existing home sales release from the National
Association of Realtors," the Atlanta Fed said on its website.

The government will release its third reading of U.S. gross
domestic product in the second quarter at 8:30 a.m. (1230 GMT)
on Friday. Analysts polled by Reuters forecast the final reading
on second-quarter GDP likely come in at 3.7 percent.